Establishing a corporate sustainability monitoring tool using the shareholder engagement commitment indicator

This article explains the construction of a shareholder engagement commitment (SEC) indicator that enables the comparison of shareholder engagement activities for responsible investment from a company perspective. The study of four elements in engagement that are tied to the robustness of interaction between shareholders and companies enables this comparison. The elements are (i) the frequency of shareholders’ interest in the responsible behaviour of their investments; (ii) the magnitude of support from other shareholders on the issues raised; (iii) the efficiency of company responses and (iv) the sustainability of engagement solutions previously addressed. The SEC indicator is a stable indicator that enables cross-country and cross-company comparisons, as well as time-series comparison for the same company. It is potentially useful for regulators, non-government organizations (NGOs), investors and companies to monitor the corporate social responsibility progress of an organization. In addition to descriptive assessment and case studies techniques, shareholder engagement can now be studied using quantitative methods that allow causal analysis.